According to the Reserve Bank of India's KLEMS database, the workforce grew by 168 million to 643.3 million in FY24, increasing the employment rate to 44.2% from 34.7% in FY18. For FY23, employment was 596.7 million; FY24 added 46.6 million. The unemployment rate fell to 1.4% in FY24 from 2.2% in FY18. The KLEMS data provides information on five important production inputs: capital, labour, energy, materials, and services. The database is generated for 27 industries, which are pooled to form six sectors. The services sector, excluding construction, is absorbing most of the workers transitioning out of agriculture, in stark contrast to the 2000-2011 decade when construction was the leading absorber.
Top 3 Leads Today
- Budget may lower FY25 fiscal gap, market borrowing aims, says SBI Research.
- Goldman Sachs says FY25 Budget to keep fiscal deficit aim 5.1% of GDP.
- Tight liquidity may push India NBFCs to borrow offshore, says Fitch.
Indian Markets
- Money Markets Minute: The call money market rate finished below the RBI's standing deposit facility rate of 6.25% due to continued surplus liquidity. The one-day call money rate remained unchanged at 5.75%, consistent with Saturday's rate for two-day loans.
- Government Bond Brief: Government bond yields remained stable as traders opted for caution amidst limited domestic indicators. The 10-year benchmark 7.10%, 2034 bond closed with a yield of 6.99%, maintaining the same rate as Friday's closing figure of 6.99%.
- Corporate Bond Beat: Yields on corporate bonds remained stable in the secondary market, with trading activity subdued as there were no major domestic or international catalysts. Traders refrained from making substantial investments ahead of the full Union Budget for 2024-25, scheduled on July 23.
- Forex Flash: After trading within a narrow band, the rupee ended the session unchanged against the dollar, as bank purchases on behalf of importers balanced out the fall in the dollar index. The rupee fluctuated within a 7-paise range before settling at 83.4950 per dollar. This marked a marginal change from Friday's closing rate of 83.4850 per dollar.
- Stocks Spotlight: Benchmark indices showed minimal movement as investors opted to take profits from stocks with high valuations despite ongoing optimism driven by expectations of increased consumption from the upcoming full Budget and strong quarterly earnings. The Nifty 50 finished slightly at 24,320.55 points, while the Sensex closed 36.22 points lower at 79,960.38 points.
International Markets
- US Stocks: The S&P 500 and Nasdaq closed at new highs on Monday ahead of inflation data to be released on Thursday and quarterly earnings season. The Dow ended down 0.08%, while the S&P 500 was up 0.10%, and the Nasdaq rose 0.28%. Investors will wait for April—June quarterly results from Citigroup, JP Morgan, and Wells Fargo this Friday. Market participants expect June Inflation to ease to 3.1%.
- Treasuries: Treasury yields were mixed as investors waited for guidance from the US central bank and June inflation data later this week to determine the next steps for government bonds. The yield on benchmark US 10-year notes rose slightly to 4.278%, while the 30-year bond yield fell slightly to 4.4628%. Investors eagerly anticipated Powell's remarks to Congress on Tuesday and Wednesday, seeking greater insight into the potential for interest rate cuts by the U.S. central bank.
- Currency: The euro dropped on Monday but recovered from overnight lows against the dollar following France's election, which resulted in a hung parliament. Leftist alliances unexpectedly won Sunday's French parliamentary runoff election, defeating Marine Le Pen's nationalist National Rally party, raising the possibility that France would leave the Eurozone. The dollar recovered from a more than three-week low after US payrolls data reported on Friday raised anticipation that the Federal Reserve will soon begin decreasing interest rates.
Trading Trends
Traded volume(in Cr) in corporate bonds by sector and maturity:
| Macro Sectors | 0-1y | 1-3y | 3-5y | 5-10y | >10y |
|---|---|---|---|---|---|
| Financial Institution | 305 | 465 | 125 | 953 | - |
| NBFC | 1233 | 291 | 101 | 110 | 7 |
| Private Sector Bank | 711 | 426 | - | 3 | - |
| Housing Finance Company | 245 | 80 | 118 | 177 | - |
| Diversified | 325 | 175 | - | - | - |
Secondary trade details for recently issued primary corporate bonds:
Security Name |
Issue Date |
Trades Since Issue(Cr) |
Avg Yield(%) |
LTY (%) |
|---|---|---|---|---|
| 7.36 SBI 27JUN39 | 2024-06-27 | 1670.00 | 7.36 | 7.36 |
| 7.43 NBFID 04JUL34 | 2024-07-04 | 725.00 | 7.43 | 7.44 |
| 11.00 GMR INFRA 26JUN2026 CALL 26JUN2027 | 2024-06-26 | 600.00 | 15.67 | 15.71 |
| 7.53 ICICI 03JUL34 | 2024-07-01 | 400.00 | 7.52 | 7.53 |
| 8.64 CHOLAINVFIN 26JUN29 | 2024-06-26 | 355.20 | 8.63 | 8.63 |
| 7.87 INDIGRID 24FEB27 | 2024-06-24 | 350.00 | 8.02 | 8.04 |
| 8.42 GODREJIND 27DEC27 | 2024-06-27 | 295.00 | 8.44 | 8.44 |
| 9.15 SHRIRAMFIN 28JUN29 | 2024-06-28 | 282.00 | 9.14 | 9.14 |
| 8.07 ICICI HFL 01OCT27 | 2024-07-01 | 280.00 | 8.10 | 8.09 |
| 7.93 TATA POWER RENEWABLE 26JUN29 | 2024-06-26 | 265.00 | 7.92 | 7.92 |
| 8.35 AXISFIN 23JUN34 | 2024-06-24 | 235.00 | 8.35 | 8.30 |
| 8.1629 L&T FINANCE 30SEP27 | 2024-06-28 | 160.00 | 8.18 | 8.18 |
| 7.41 IIFCL 26JUN39 | 2024-06-26 | 160.00 | 7.39 | 7.39 |
| 7.89 BOM - C 04JUL34 M | 2024-07-04 | 150.00 | 7.91 | 7.87 |
| 7.93 TATA POWER RENEWABLE 26JUN34 | 2024-06-26 | 150.00 | 7.92 | 7.92 |
| 9.84 SPANDANA 28JUN26 | 2024-06-28 | 106.23 | 10.94 | 11.28 |
| 7.44 IREDALTD 25AUG34 | 2024-06-25 | 75.00 | 7.44 | 7.44 |
| 11.00 UTKRASHBANK - C 26JUN31 M | 2024-06-27 | 59.59 | 11.38 | 10.92 |
Source: Harmoney data analytics
Events This Week
July 9, Tuesday:
- US Federal Powell presents Monetary Policy Report.
July 10, Wednesday:
- US Monthly Wholesale Trade for May.
- US EIA Weekly Petroleum Status Report for Jul 5 week.
- India M3 Money Supply for Jun 28 week.
July 11, Thursday:
- US Real Earnings for June.
- US Unemployment Insurance Weekly Claims Report.
- US Weekly Export Sales.
- US CPI for June.
- US EIA Weekly Natural Gas Storage Report for Jul 5 week.
July 12, Friday:
- US PPI for June.
- India Bank Loan Growth for Jun 28 week.
- India Deposit Growth for Jun 28 week.
- India Foreign Exchange Reserves for Jul 5 week.
- India Industrial Production for May.
- India Inflation Rate for June.
- India Manufacturing Production for May.
- India Inflation Rate for June.
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